Mr. Redwood:
I am surprised by the hon. Gentleman's fulsome praise. Has he, for example, read the hypothetical company test on pages 25 and 26? Is he suggesting that that is expressed with lucidity, so that a reasonable and well educated person can understand it? It looks like the old gobbledegook in a new bottle.

Mr. Burnett:
I have not read every word in the Bill--I apologise to the House for that--but I have read significant parts of it. I have read sufficient to satisfy myself that it is a considerable improvement on the law that hitherto prevailed.

Mr. Ruffley:
I am grateful to the hon. Gentleman. Would he like to hazard a guess as to the average amount of time spent by the Committee deliberating on each of the 66 minor changes?

Mr. Burnett:
As I said, I was not a member of the Committee, but I have read the three Hansard reports and I suspect that the Committee spent a total of less than 10 hours deliberating on the Bill. I am happy to give way to the right hon. and learned Member for Rushcliffe (Mr. Clarke) if he wants to correct me.

To return to what I was saying, the tax law rewrite committee's ambitions have largely been achieved, and the new Bill is considerably more understandable. The use of plain English, with shorter sentences and clearer structure, is welcome. The explanatory notes are helpful and act, as I said on Second Reading, almost as an index.

The real problem that I experienced as a lawyer dealing with taxation matters was hunting around the various sections and statutes to find out exactly what the law was. The dovetailing and consolidation in the Bill are particularly welcome.

On Second Reading, we discussed the drawing into the Bill of various Inland Revenue concessions. That is important. When the Paymaster General intervened in my speech on Second Reading, she mentioned that a number of concessions remain unincorporated in primary legislation. I hope that that will be remedied soon, because although Inland Revenue concessions and, for that matter, statements of practice do not have legislative force, they must be relied on by taxpayers and their advisers.

Mr. Hogg:
There is, of course, a problem, which I think the hon. Gentleman would admit: if, in the process of rewriting, extra-statutory concessions are incorporated

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into statutory language, a substantive change to the law takes place without the authority of Parliament. That has, in fact, happened in this case.

Mr. Burnett:
The right hon. and learned Gentleman makes a good point. He anticipates what I am about to say. Taxpayers deserve certainty and should not have to put up with rules that are not laws passed by the House. That is extremely important. With regard to the effect of concessions on the law, concessions were largely an explanation of existing law and do not make a substantial or even a small change in the underlying law.

Mr. Redwood:
I am sorry to return to the matter, but the hon. Gentleman said that he admired the shorter sentences in the Bill. I wonder whether he has read it. The hypothetical company test to which I referred has 84 words in its first sentence, and that is by no means the longest one. I recommend to him the definition of the limit on amount deferred--clause 138--which is probably twice the length. He ought to read the Bill.

Mr. Burnett:
As I explained to the right hon. Gentleman, who is welcome to look at my copy of the will--[Laughter.] I almost had to redraft my will. If he looks at my copy of the Bill, he will see that it is fairly well thumbed. If he has scrutinised at length the Capital Allowances Act 1990 and the numerous Finance Acts that impact on capital allowances, and if he has even a scintilla or a basic modicum of knowledge, he will know that the Bill is infinitely better than the law that now prevails.

After the tax law rewrite committee's report was published, the Select Committee on Procedure conducted an inquiry into the appropriate parliamentary procedures for tax simplification legislation. The tax law rewrite committee stated that the purpose of debating such legislation was to discuss

"the clarity of the law, and whether further improvements could be made to that end; and whether or not the Bill accurately reproduces the effect of the existing law, other than where (with a view to simplification) departures are intentional, as disclosed by the explanatory memorandum."

There was consensus that it was appropriate that policy in general should not be debated.

The Procedure Committee's report stated, however, that

"such a debate would be likely to be largely"--

I emphasise the word "largely"--

"technical and 'Policy free'."
The debate would not, therefore, be entirely technical and policy free, but would be largely so.

With that in mind, I should like to raise one or two issues that relate to simplification and that should therefore be considered and debated now. First, I hope that all hon. Members agree that deeming provisions should be avoided in legislation. Unfortunately, although the Bill is by and large successful, deeming provisions continue to be used. On Second Reading, I referred to clause 297(2), which states:

"This Part has effect in relation to the person to whom the relevant interest is sold as if--".

The provision goes on to define the relevant expenditure, writing-down allowances and appropriate balancing

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adjustment. However, it is important for clauses in tax law simplification Bills to say what happens in exact circumstances. They must deal with the tax effect in given circumstances, not pretend that something has happened and then provide for the tax consequences.

Mr. Hogg:
Will the hon. Gentleman give way?

Mr. Burnett:
No, not at the moment.

Such an approach over-complicates and obscures tax law. I hope that future Bills will avoid the use of deeming provisions.

Mr. Hogg:
Will the hon. Gentleman give way now?

Mr. Burnett:
No, I shall not do so for the moment.

Secondly, it is important to simplify the law. The last three Finance Bills--I had the mixed fortune of serving on the Standing Committees that considered the last two--have introduced countless extra complications and numerous tax rates. It is asking enough of the rewrite committee to give it the task of rewriting the plethora of existing legislation and dovetailing it into a specific Act. The Government must now resist the temptation to tinker gratuitously with the tax system and make it more and more complicated.

The Government could help the rewrite committee and taxpayers by altering the impact of balancing charges, especially for the small business sector. The balancing charge impacts on the taxpayer in one hit, whereas the allowance is made on a reducing-balance basis and, at best, takes seven or eight years to write out the cost of the asset. Surely the Revenue should not be treated considerably more favourably than the taxpayer and there should be some equity in the law between the two.

I hope that the Paymaster General will make it clear that, once a rewrite Bill has been enacted, future legislation--in this case, capital allowances legislation--will be drafted in the same helpful and comprehensive manner, on the basis of fitting into the existing rewritten form. It would be a complete waste of time and effort if future legislation reverted to type. There would be a mismatch: some legislation would be rewritten, but the remainder would be in the almost incomprehensible language that currently prevails.

As I have said several times, the Bill and the explanatory notes are welcome. I hope that, in due course, tax law will be capable of being understood by a reasonably intelligent person who is prepared to devote a reasonable amount of time to the task. The Bill's chief merits include dovetailing legislation into one measure and reordering legislation. The latter is especially helpful.

In a House of Lords debate on the taxation of chargeable gains, no less a legal authority than Lord Wilberforce said:

"This legislation is of unimaginable complexity. It is absolutely impossible for the ordinary citizen to understand. It is impossible for many accountants to understand. Indeed, as I know from personal experience, it is also impossible for the officials of the Inland Revenue to understand."--[Official Report, House of Lords, 14 January 1992; Vol. 534, c. 119.]

I look forward to learning from the Paymaster General the next Act that is to be rewritten and when it will be considered in the House.

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11.1 pm

Mr. John Redwood (Wokingham):
I have declared my interests in the register. The Bill demonstrates that if we begin with muddled, complicated, difficult and detailed legislation, no amount of rewriting can make it simple, straightforward and easy to comprehend. I have every sympathy with my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who chaired the Joint Committee and tried to respond to well intentioned proposals.

However, the Government have missed a great opportunity. If they were serious about simplifying the capital allowance rules, they should have been bolder, changed the rules more dramatically, introduced new policy and attendant legislation and encouraged proper debate on methods of genuinely simplifying legislation that had grown like Topsy over many years under successive Governments and is now out of control.

The Paymaster General invites us to believe that a Bill with 581 clauses and four schedules is an easy read. It may not be Enid Blyton--to echo the vivid speech of my right hon. and learned Friend the Member for Rushcliffe--but the Paymaster General tries to persuade us that the measure is sufficiently lucid for ordinary people to read, digest and understand, and remain undeterred by its enormous bulk. It contributes to understanding only part of the way in which corporate tax works in this country. It does not relate to the biggest part of our tax system in terms of the revenue raised or the impact on the daily life of British people. It takes 333 pages to establish the sort of allowances companies can try to offset against corporation tax liability. Yet the Paymaster General tells us without a hint of irony, humour or malice that she is proud of an effort that she perceives as an enormous simplification, which should make us leap for joy.

Before I became a Member of Parliament, I was executive director of a couple of companies. What would I think if I was now in that position and had to respond to the Bill, if it receives Royal Assent? Would I be grateful? Would I sit in my office and exclaim, "This is wonderful--the House of Commons has at last done something to make my life easier. I now have only 333 new pages to read and all will be clear about gaining capital allowances for my company's investment"? I fear that that would not be my reaction. I would perceive the Bill as a confounded nuisance. I would already have approached tax lawyers and accountants to take advice on the impact of existing tax law on those businesses. I would have paid the fees, made the calculations, and I would know where I stood. I would then have to repeat the process because the Bill makes 66 detailed changes.

My generous right hon. and learned Friend the Member for Rushcliffe assures us that the changes try to ease the burden on taxpayers and give the benefit of the doubt where doubt previously existed. That is a very worthy idea. However, the companies that I am describing would still--in their own interest--have to go back to their tax lawyers and accountants to find out whether they were beneficiaries of any of those 66 changes. Were they not to benefit from them, they would have succeeded only in spending a lot more money on legal advice, tax advice and accountancy advice for no benefit, because they would not have scraped through into any of the new improved arrangements.

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When we consider the Bill in more detail, I fear that we may also find examples in which lawyers and accountants will be able to cavil that the changes have not always gone in the direction of the taxpayer. The House must scrutinise that matter carefully.